Answers to your insurance questions

It is always helpful if you have some questions prepared for when you talk with a professional. If you go to see your doctor, then knowing a bit about your disease, concern or symptoms, will make sure that you bring up the topics that are of concern to you. It is the same with life insurance. The person you are talking to will likely have many products, and you need to be sure that you understand what you will purchase.

1. Is this product convertible from one form to another? You may wish to start with a "Term" policy now, and then convert to a "Whole Life" policy later. The money you save now, can be invested to help you achieve certain goals. The Whole Life policy will need to be purchased before your age makes the cost prohibitive.

2. Is there an option to add-on coverage at future dates, without having to qualify medically or occupation? At first, you may want to just purchase enough insurance to cover your burial costs and outstanding debts. Once you have family obligations, you would likely want to increase the coverage. If your health has changed in this time, then you might not be able to qualify for higher limits. You may also be in a higher-risk occupation.

3. Will the premiums stay the same or do they increase as I grow older? Whole Life policies usually have a set premium. Term life usually is less expensive while you are young.

4. Is the premium to be paid until I die? Some policies are paid within a certain number of years and others you will continue to pay. What appears to be a bargain may not in the long term.

5. If the premium is paid up at a certain point, does the policy now develop an "excess cash value"? This could be important if you are looking at using your life insurance as part of your investments. Find out what options are available to you.

6. Is the policy a joint "First-to-Die Form" that will pay out when either husband or wife dies? This type of policy provides for the husband or the wife, whichever one is left when the other dies. If that is the intention, it is usually less expensive then two policies.

7. What medical requirements are there to qualify for this policy? There could be requirements for blood, EKG or other tests with the higher limits. If this is a concern to you, then you should know this up front.

8. I am self-employed. Can my company pay for this insurance? Will this affect the Beneficiary? Does this still give you what you want for your family?

9. Can the policy be cancelled by the insurance company? This would be a concern for other then a non-payment cancellation. If you reach a certain age, where death is more likely, can the insurance company now opt out of the coverage?

10. Can the "Designated Beneficiary" be changed? If you wish the Beneficiary to irrevocable or subject-to-change, then this is an important point. Also to be considered, is who will own the policy? This might be a way of preventing a change of Beneficiary in future years.